What to Avoid During your Home Purchase

Some new homebuyers make the mistake of rushing out to buy new things for their home as soon as the seller accepts their offer and the loan is approved. Until the house is really yours, there are still some hurdles to jump. We have listed some actions below we suggest you stay away from when waiting for your loan to close.

Don't empty your wallet on big-ticket items Although you may be planning ways to turn your new house into a castle, avoid big ticket purchases like appliances, electronics, or furniture. We also recommend that you avoid vacations and car purchases until the closing of your loan. You may send up red flags with your lender if you finance new furniture on your credit cards during your loan process. Using cash to purchase big-ticket items can even create a bad idea: most lending institutions consider your available cash when approving your mortgage.

Don't get a new career. Consistency in your work history is a positive thing to lending institutions. Getting a new career before you apply for a mortgage may not affect your approval at all. However, if you switch careers before you qualify, your process could fail or be stalled.

Don't move cash around or switch banks. Bank statements from recent months for accounts in your name (savings, checking, money market, and other assets) will likely be analyzed as the lender considers your approval. Your lending institution looks for a consistent rise and fall of your money over the month, in order to avoid fraud. Changing banks or moving money elsewhere - even if its merely to consolidate funds - could make it difficult for your lender to verify your funds.

Don't give your FSBO (for sale by owner) seller a "good faith" deposit, made out directly to him. As a rule, your good faith money is yours, not the seller's up until the sale is final. Although your seller might not understand this, the good faith money must be applied to your closing expenses. An attorney or other type of neutral party can hold your earnest funds, or you may put them temporarily into a trust account until closing. The disposition of good faith funds, if your sale fails, should be included in the contract with your seller.

Amity Mortgage LLC can walk you through the pitfalls of getting a mortgage. Call us: 2037296681.